Target is building new supply chain software to better align inventory availability with consumer demands. To better position the retailer for online and mobile shopping, the retailer’s IT team is writing custom software to quicken the pace with which merchandise gets from its stores to consumers.

"We need to get the fundamentals in place and that's because the stress and strain we put on our supply chain today is very different to what was the case four or five years ago," says Target CIO Mike McNamara, who spoke to CIO.com at the Forbes CIO Summit earlier this month.

Target's plans are comparable to other big box retailers trying to keep afloat in the vast digital retail sea ruled by Amazon.com. Wal-Mart Stores has overhauled its ecommerce platform and built custom cloud infrastructure and online search capabilities, some of which it has released to the open source community.

Why Target is tidying up its supply chain

Target, which last year allocated $1 billion for its digital business transformation, is modernizing an outdated supply chain predicated on a linear model in which goods went from the manufacturer to a distribution center and then one of its 1,800 stores for purchase.